Energy Nord Stream 2 18 May, 2017 9:00 am   
Editorial staff

Nord Stream 2 delayed?

According to Frankfurter Allgemeine Zeitung (FAZ) the EC talks with Member States on granting it a negotiation mandate regarding Nord Stream 2 are coming to an end. The Commission will present the results in the next two to three weeks. The German daily also claims that Brussels may delay the project for months, or even years.

FAZ reported that the construction of the pipeline was not only about doubling its capacity by adding a new pipe to the already existing Nord Stream 1, and thus increasing the region’s dependence on Russia and its gas. The EC needs to determine whether the planned pipeline construction does not breach EU’s antimonopoly law, whether Gazprom can be a gas supplier and pipeline owner at the same time, and whether other entities, e.g. Rosneft, can receive access to Nord Stream 2.

According to FAZ, the letter was a bitter disappointment to Russia, which hoped the EC would overcome the resistance against Nord Stream 2. Interestingly enough, the German newspaper also predicts that it was quite probable that Denmark would not issue consent for the construction of the pipeline before the EC-Gazprom talks were over. This may delay the project, which is scheduled for completion in 2019. It is worth remembering that the planned route of the pipe will go through Danish territorial waters, which is why Copenhagen needs to issue a permit.

FAZ stressed this was extremely important because once Brussels receives the mandate, the Danish may suspend their decision until the talks with Russia end.

The daily claims Germany would try to block the mandate, but the result of these efforts was uncertain. It depends on what legal grounds the EC will base their decision . That will determine whether the ruling will need a qualified, or a unanimous vote in the Council of Ministers. According to FAZ, Poland and Lithuania’s consent is also uncertain. Both states may deem the EC proposal disadvantageous, because “certain concessions” may ensure that Nord Stream 2 will be constructed.

Concerns in Central and Eastern Europe

We need to remember that in response to letters from Danish and Swedish governments, which demanded that Nord Stream 2 be subject to EU law and Energy Union objectives, Brussels informed that it wanted to receive a negotiation mandate from Member States in order to hold talks on their behalf with Russia.

The first gas pipeline from Russia to Germany across the Baltic Sea – Nord Stream – has two lines and was launched 5 years ago. Its capacity is 55 bcm a  year. The construction of the second submarine pipeline will increase the capacity to 110 bcm. Nord Stream 2 may pose a risk to gas market development in the region and potential competition from new, non-Russian sources.